organisational change Great People Inside

Organisational Change: High-Risk – High-Reward & How to Do It Right

Most organisational change efforts take longer and cost more money than leaders and managers anticipate. In fact, research from McKinsey & Company shows that 70% of all transformations fail. Why does this happen though?

For many reasons: a weak culture that isn’t aligned with the mission, leadership misalignment, lack of participation and buy-in, under-communicating a powerful vision, over-communicating a poor vision, competing priorities, not enough training or resources, and so on. But one very critical roadblock standing in the way of bringing a change vision to fruition is what experts call ‘change battle fatigue’. Change battle fatigue is the result of many elements such as past failures plaguing the minds of employees, the sacrifices made during the arduous change process, and rollout strategies taking longer than anticipated. When a transformation is poorly led, fatigue can set in quickly.

And not only do 70% of organisational change fails, but that failure rate may even be increasing. According to older but still very relevant 2008 research from IBM, the need to lead change is growing, but our ability to fulfill a change vision is shrinking. Hence why people often get discouraged and eventually give up. Even when companies make great strides while building a change culture and preparing for the ‘change battle’, fatigue can derail even the most valiant efforts for change—essentially leading to losing the ‘change battle’.

It’s difficult for managers and staff to get motivated when they believe that the latest ‘new initiative’ being preached from above is going to die just like the last one—no matter what they do. Furthermore, fear makes change intensely personal. People become concerned about their jobs, families, and long-term career path. When people are afraid, most can’t hear or think as well. It’s much harder for them to absorb important information when panic starts to set in. This can be a big distraction that undermines the team’s ability to focus and stay productive. And times of change are when you need them more focused than ever.

Thus, the often-cited failure rate of organisational change continues to hover around 70%. If you’ve got a major change on the horizon, here’s how to avoid the most common ‘saboteurs’ of organisational change.

Underestimating the work

Simply put, most leaders want organisational change to be easier than it is. By its nature, transformational change creates discontinuity because it touches the entire company. In the case of a financial services company, shifting from product to service centricity meant every aspect of the organisation, from sales to operations, is going to be touched by the need for change.

By contrast, incremental change — for example, implementing a new technology platform or launching a new product — touches discrete aspects of the organisation. Most companies makee the same mistake: They assume that a larger volume of incremental changes would add up to a complete transformation. Henceforth, they spray the organisation with numerous, disconnected initiatives whose efforts weren’t coordinated, that were actually under-resourced for what they were expected to deliver, and whose project leaders lacked the authority to make material decisions or impose consequences on those unwilling to cooperate. Instead of accelerated change, the result was obstructed change — a system clogged with an overload of disparate efforts that everyone stopped caring about.

A multifaceted transformational change needs to be appropriately scoped, resourced, and integrated. Every initiative must be linked to every other initiative. In the case of most organisations, efforts to market the benefits of newly positioned services need to be synchronised with the efforts of operations people to actually deliver those services. Messages to customers needed to sync with new skills those delivering the services needed to acquire. Centralised services from corporate needed to work closely with local branch offices’ ability to customise services. And it all needs to be sequenced and paced in a way the organisation could productively absorb. Once these efforts are appropriately integrated, means and ends will begin to match, and real organisational change eventually aligns with the messages.

Creating Cultural Experiences That Support The Vision

Cultural experiences are imperative to instill the proper mindsets and beliefs that drive actions that get results. What are cultural experiences? They can be anything from how people interact, the work environment, how the company approaches its customers, company meetings and events, hiring mechanism, to where people sit.

There are four types of cultural experiences as they relate to organisational change:

(1) positively impact change and needs no interpretation;

(2) positively impact change but needs more interpretation to engage the team;

(3) has no positive or negative impact the change effort;

(4) has a negative impact on the organisation.

Type 1 and type 2 cultural experiences help drive engagement and belief in the mission. They keep the team energised.

Emotional Intelligence & Increasing Situational Awareness

In combat, situational awareness is an obvious necessity. Not always easily achieved but a constant priority requiring good communication and leadership at every level. Situational awareness at the individual level could also be described as self-awareness – a key component of emotional intelligence.

Emotional intelligence is widely known to be a key component of effective leadership, especially when navigating change and uncertainty. The ability to be perceptively in tune with yourself and your emotions, as well as having sound situational awareness, can be a powerful tool for leading a team in VUCA (volatile, uncertain, complex, ambiguous) environments. The act of knowing, understanding, and responding to emotions, overcoming stress in the moment, and being aware of how your words and actions affect others is described as emotional intelligence. Emotional intelligence consists of these four attributes: self-awareness, self-management, social awareness, and relationship management.

For example, a study of over forty Fortune 500 companies showed that salespeople with high emotional intelligence outperformed those with low to medium emotional intelligence by 50%. The same study showed that technical programmers who fell in the top 10% of emotional intelligence competencies were producing new software at a rate three times faster than those who fell in the lower ratings.

Emotional intelligence also improves employee satisfaction, something vitally important during any change effort. A West Coast bank was forced to cut almost one-third of its staff due to the economic downturn back in 2008. Determined to survive the ‘change battle’, the leadership team invested in assessing the remaining staff for their levels of emotional intelligence. The results supported their transformation goals to ensure they not only had the right people on the bus but that those people were in the right seats—doing jobs best suited to their capabilities. The company survived and is now more productive and more profitable with fewer employees.

It’s hard to make organisational change turn out the way you want to. But by doing your due diligence and creating the plan that makes the most sense for your company, you’ll increase the chances your change management efforts are successful. As a result, you’ll have a strong, healthy company that’s well-positioned to keep dominating for some time to come.

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